< Back What to Do When Communication Styles Clash: Embrace It Jennie Boden Feb 18, 2019 Building a culture of inclusivity helps ensure each voice on your board is heard. Once when my firm, Quantum Governance L3C, was looking at some assessment tools that might help our clients, we spent the fall taking them for a test drive. We spent time looking at the DiSC profile , the CliftonStrengths assessment and more. In essence, we were putting our staff through some of the paces through which we often put our clients—boards of directors of credit unions, associations, foundations and other nonprofits. We use assessment tools with our clients with the intent to improve their ability to function as a team and increase their governance effectiveness. With these test drives, I learned a lot about myself and my colleagues. I learned that I like “contributing to a calm, stable atmosphere” and “working with people who genuinely care about one another.” And I definitely don’t like “dealing with angry, pushy or argumentative people,” or “having to argue for [my] point of view”—although I think my husband would likely disagree with that last observation. One of the personality tests called me “amiable.” The results of the tests helped me to understand some of the factors that motivate my behavior and the way that I communicate and interact with my colleagues, how they interact with me, and our own team’s dynamics. To this day, when one of my colleagues says I’m being “too soft,” I’ll simply reply, “Remember, I’m the amiable one.” It’s a common language and experience from which we can both draw. But it can be tough sometimes, can’t it, when personalities and communications styles clash? We all believe in the value of diversity. In fact, when we interview board members (and we interview a lot of them), diversity is one of the things that they feel their board is lacking the most! They believe that their boards (and their credit unions) would be better off if they reflected the diverse make-up of their credit union’s membership. And they are probably right. At Quantum Governance, we define diversity as the quality of being different or unique at the individual or group level. And yet, while we’re all going around valuing and actively seeking diversity, it’s the very nature of diversity that can cause communications challenges. My perspectives and the way I communicate are, by definition, different from the perspectives and communication style that my firm’s CEO brings to the table. First, the obvious: I am female; he is male. Second, I was raised in a small, rural town in Pennsylvania; he was raised, well, everywhere. He moved 25-plus times by the time he was 30. I was educated by liberals at UC-Berkeley; he, by the Jesuits of Georgetown. I studied literature; he studied law. I am a quiet, amiable communicator; he is larger than life. I like big, lumbering dogs (think Lab/Great Dane mixes!); he likes multitudes of small, cuddly pups. And yet, for more than 25 years, we have been working and collaborating happily and effectively together. And you, too, can work effectively with those who are vastly different from you. Instead of avoiding the challenges that will, by definition, arise from the diversity that surrounds you, embrace them. The true value of diversity is in what it brings us—the variety of thought, perspectives, context and experience. It helps us all—whether an entire credit union, its board or even an individual—grow and strengthen in ways that we never imagined. There is a twin pillar to diversity that will show you the way. It is the notion of inclusivity. When a diverse board, team or even diversity in a one-on-one relationship challenges your ability to communicate, work to build inclusivity—an environment where everyone genuinely feels included, supported, heard and able to contribute to the success of the whole. My father was a minister in that small rural Pennsylvania town where I grew up, and my amiable self was most likely born from his drilling into my head, “Try to understand the other person, Jennie,” which was his own definition of building inclusivity. When my communication style clashes with another, this is my go-to tactic. And I employ it all of the time. Communication styles clash because people are diverse. Ultimately, however, making a diligent effort to work effectively and even thrive in a diverse world will not only enrich you as an individual but strengthen your board and your credit union’s leadership. Previous Next

Leadership Resources Finding Balance in Board Meetings Efficiency vs. Engagement Read More A Matter of Leadership CUs need to pave a new road to ensure a strong, high-performing board over time. Read More Nine Leadership Challenges The board of the future will need the strength to overcome these. Read More No Higher Calling The challenge of effective CEO evaluation Read More 'Quantum' Board Engagement Six questions to help you more fully get your board engaged Read More Board Engagement Needs A Boost Strategies to use in your monthly meetings Read More A Matter of Culture What drives yours? Here are 10 elements to shoot for in your board room. Read More Surfacing Assumptions Knowing what you're assuming can boost board strategic thinking. Read More Fiduciary AND Strategic Thought Needed Finding the right balance between operational oversight and visionary dialogue in your boardroom is worth the struggle. Read More

The Four Elements of Good Governance Resources Finding Balance in Board Meetings Efficiency vs. Engagement Read More What Key Factor May Be Working Against Your Interest in Raising Board Engagement and Accountability Discover the hidden factor sabotaging your board's engagement and accountability, and learn how to address it effectively. Read More The Sophisticated Art of Ensuring Your Board Grows Alongside Your Credit Union Four areas to focus on. Read More Is Your Organizational Success An Accident? New study suggests where to look for the answer. Read More Why Directors Are Chess Pieces, Not Checkers Every director should be ‘chair material’—even if they wouldn’t make a good chair. Read More Building Your Associate Board Member Program, From The Philosophy Up The groundwork for success includes commitment from the start. Read More Advice from My Hero Six key responsibilities of every board, gleaned from my conversation with world-renowned expert Ram Charan. Read More The Learning Board Three key building blocks Read More Creating a 'Wow' Credit Union Board Meeting How to Take Your Meetings to the Next Level Read More 'Quantum' Board Engagement Six questions to help you more fully get your board engaged Read More Board Engagement Needs A Boost Strategies to use in your monthly meetings Read More

< Back Two Of The Five Top Questions Board Chairs Have Michael Daigneault and Jennie Boden Oct 23, 2018 1. Should chairs vote? 2. What’s the best way to ask a director to move on? Quantum Governance recently had the privilege of spending a few days with nearly 100 credit union board chairs, vice-chairs and others when we conducted the Board Chair Development Seminar for CUES in Amelia Island, Fla. In this article, we put forth two of the top five questions we learned were on their minds and make an attempt to answer them. Question 1: Should board chairs vote on all regular matters? This first question surprised us. We were amazed to find that 50 percent or more of the board chairs in attendance said they didn’t vote unless there was “a tie in the boardroom.” Remarkable. They, in turn, were stunned when we told them that this practice was simply wrong. Digging further, their assumptions behind their abstention made some sense and evidenced an important desire for fairness. For example, they were concerned that: “A board chair, in expressing his or her opinion, might unduly sway the will of the whole,” and “Our board chair is the most senior member of our board and everyone looks to him; it wouldn’t be fair.”These are valid points, and we wholeheartedly agree on the need to ensure fairness and the ability to hear everyone’s voice in the boardroom. However, even board chairs have rights! The No. 1 question on Robert’s Rules of Order ’s online FAQs is: “Is it true that the president [also meaning chair] can vote only to break a tie?” Robert’s Rules of Order says “No, it is not true that the president [again, here, they also mean a chair] can vote only to break a tie. If the president is a member of the voting body [which the board chair of a credit union is], he or she has exactly the same rights and privileges as all other members have, including the rights to make motions, to speak in debate, and to vote on all questions ….” When you and your colleagues on the board address conflicts of interest, your efforts are not about eliminating them, but mitigating them. Similarly, your board chair not only has rights, but also a governance duty to independently express his or her opinion on matters before the board. He or she should also share experience, thoughts and perspectives which you likely want to consider. Follow some basic steps and you’ll be fine: Elect individuals to the role of chair who can be fair, objective facilitators. Ask the chair to share his/her thoughts at the close of the discussion, not at the beginning. Unless the vote is a private ballot, the chair’s vote should be rendered last. (Note that we found this voting issue to be so important that we’re working on a full white paper on this topic, and it will be published soon!) Question 2: How do I talk with a board member about moving on? In our recently released State of Credit Union Governance, 2018 , 74 percent of respondents reported that their boards are effective or very effective at having the right mix of skills or experience to accomplish its governance roles and responsibilities. And yet, still, asking a board member to move on remains one of the top issues on board chairs’ minds. We get it. It’s a hard one. Without term limits in place at many credit unions, board members may serve far beyond their time. We know it sounds harsh, but it’s true. We had a client once warn us that there were one or two members on the board that might have dementia, but they did not ask them to move on for fear of upsetting them. From a human perspective, we understand it. But from a governance perspective, one has to ask whether those board members are able to aptly fulfill their legal duties and governance roles and responsibilities. We offer these five tips to help you engage in the hard conversation when it’s time for a board member to transition off your board. Have your chair, along with at least one other trusted board member, engage in a private conversation, and: Be respectful and open; approach the conversation with a genuine desire to learn. Try to understand where the board member in question is—what his or her perspective is and what might make a transition easier. Focus on what you’re hearing and not on what you’re saying. This isn’t about you. This is about your board member. People will respond better if they are feeling heard. Be direct and get to the point. We know it’s a hard conversation, but don’t “beat around the bush.” Don’t put it off! When you know that you need to have the conversation, have it. You’ll be doing everyone a favor. Don’t wait until you get to the point of having a member with dementia—even possible dementia—on your board. Expect a positive outcome, even if that outcome may be that the board member moves on; it could be good for him/her and the board. Not all transitions are bad. Don’t assume that the outcome will be bad for the board member. Look for a graceful exit and transition for all. We felt that all five of the top questions on board. chairs' minds were vital—and that if they were on the minds of the board chairs, they were likely on the minds of other directors and CEOs, too. (Are they on yours?) Previous Next

< Back A Continuously Bigger and Better Box Jennie Boden and Dr. Alexander Stein of Dolus Advisors Feb 1, 2022 Like a nautilus, Hudson Valley Credit Union’s board evolves beautifully into its next stage of governance. The nautilus is a shelled sea creature known for renewing itself in a most beautiful fashion. It builds a new chamber inside the cover of its shell, moves out of the compartment in which it has been living, and seals off the old. As it progresses over time, the nautilus creates an amazing spiral shell with many sections. In an ideal world, credit union boards would renew themselves as the nautilus does—building on the old to create a new, more expansive governance space. But how many credit unions engage in conversations about building the next era of board governance? In the 2020 State of Credit Union Governance , we reported that almost 25% of all board members have held their positions for at least 20 years. That’s okay to some extent because historical continuity is good. Institutional knowledge and accrued wisdom are important to tackling today’s complexities. On the other hand, we’ve seen directors who perpetuated a negative culture for decades and boards where members were battling serious age-related health issues. We’ve also seen boards struggle under the weight of training too many newcomers, people with insufficient experience joining the boards of $2 billion credit unions, and recent additions who didn’t understand the difference between governing and managing. How do credit union boards transition to their next stage more like the nautilus—gracefully striking a balance between historical continuity and the next right steps for the board and the organization overall? When leaders at $6.5 billion Hudson Valley Credit Union , Poughkeepsie, New York, decided it was time to take a fresh, top-to-bottom look at the board’s nominations process, we were privileged to accompany them and provide our professional guidance along the way. We are grateful to them for letting us tell you their elegant and effective story of board renewal. “As our credit union continued to grow to over $6 billion, we knew we needed to transform our governance,” says Board Chair Nancy Kappler-Foster, a CUES member. “Through our work with Quantum Governance and Dolus Advisors on increasing the effectiveness of our policies and practices—and in particular the constructive partnership between the board and the CEO—we understood the next step was to focus on the ideal board and supervisory committee of the future and then build a state-of-the-art nominations process to achieve that.” Getting Started Led by Kappler-Foster, the board began by chartering a new governance and nominations committee, integrating the original nominations committee as a subcommittee within a broader governance committee charter; redefining the roles and responsibilities for board members; and reevaluating its board-level committee structure overall. Next, the board examined its entire nominations process from recruiting to onboarding. We facilitated workshops with the board, management and supervisory committee that enabled Hudson Valley CU’s volunteers and management team members to commit to a new process that: Developed an overall vision for the nominations process, attending to group dynamics, tone and culture, trust, psychological safety and, of course, good governance. Leveraged decision science, combining business tactics, technology and behavioral sciences through a collaborative approach to help leaders make optimal, data-driven decisions. Surveyed the decision landscape, identifying and evaluating the credit union’s needs and ultimate goals at the board and supervisory committee levels and forecasting the probable consequences of its decisions. Challenged everyone involved to overcome their biases and blind spots, subordinating their own personal interests to the credit union’s best interests. Valued character in the boardroom as highly as key performance indicators, identifying not only hard skills and expertise but also character traits and attributes to drive the identification and prioritization of candidates. Identifying Needed Skills and Attributes We helped Hudson Valley CU’s leaders clarify the skills and attributes they sought in new board and supervisory committee members. Like many CUs, Hudson Valley CU’s leaders hadn’t revisited their wish list in ages. (See Hudson Valley Credit Union's Call for Board Candidates Refresh for the CU’s “before” and “after” calls for candidates.) We looked to data to guide the way toward a new standard. The 2020 State of Credit Union Governance report found significant differences between what credit unions sought in their candidates and the skills and attributes they actually valued in the boardroom. And Hudson Valley CU was no different. When we surveyed the CU’s board, supervisory committee members and management, we found they had been prioritizing skills in financial literacy, professional services and operations. However, the perceived value of those skills in the boardroom was significantly lower than for human skills like being able to focus on the future, do critical thinking and be independent-minded. We recommended that the CU prioritize (in both its recruitment and nominations processes) what its leaders value most in the boardroom. In actuality, the shift was likely long overdue, as it is for most credit unions. Following an analysis of their survey data and focused work with both the volunteer and management leadership, Hudson Valley CU developed a new call for candidates that delineated specific skills, attributes and character traits that matched the credit union’s changing governance needs, culture and core values—in alignment with what board members actually value in the boardroom. (See sidebar, “Hudson Valley CU’s Call for Candidates Refresh.”) “I was so gratified to see the change in focus from fiduciary- to strategic-related skills for our new board members,” says President/CEO Mary Madden, CCE, a CUES member who has announced her retirement effective Jan. 2, 2023. “As we look to the future and the $10 billion threshold (by 2027), the management team will be looking to our board to ask the hard questions that need to be asked from a strategic point of view, while we’re overseeing the day-to-day operations. Certainly, board members need to continue to be responsive to their fiduciary duties, but strategically, there are a lot of critical, strategic decisions in front of us.” The Candidate Process Historically, Hudson Valley CU used traditional routes for board recruitment—issuing the call for candidates on its website and in member statements and posting it in its branches. The CU’s nominations subcommittee leveraged AVP/PR and Corporate Communications Lisa Morris to help get the word out in new ways. Morris placed ads on LinkedIn, sent word out to the area’s largest chambers of commerce, and conducted outreach through other specialty membership organizations and associations in the CU’s region. For the first time, board members took a more active role in recruiting. All told, Hudson Valley CU received 18 applications for three open seats for its board last year. In the end, new board members came from board and volunteer referrals and Morris’ outreach to the Professionals of Color Network Hudson Valley . Morris believes casting the net wide was a value-add. “Any additional outreach we do as a credit union—whether it’s marketing for a new product or issuing the call for candidates to and through a new association—means we’re reaching potential new members,” she says. A CEO once told Quantum Governance that his board was so concerned that he would “stack the deck” in his favor, he wasn’t even allowed to know how many applications his credit union received in response to the call for candidates. We took the opposite tack, recommending that Hudson Valley CU include Madden in the entire process. As a result, she participated as an ex-officio, non-voting member of the nominations subcommittee, lending her decades of expertise in interviewing, evaluating and vetting high-level professional candidates. “At first, we were all a bit skeptical about including Mary in the process,” said Julie Majak, the current chair of Hudson Valley CU’s nominations subcommittee. “But having her participate was an important, positive change. After we reminded ourselves that she had a voice—not a vote—we all quickly moved on to benefit greatly from our CEO’s expertise and insights. Her participation is now a given moving forward.” We also recommended the nominations subcommittee add a peer evaluation for any incumbent candidates, as well as psychometric testing in the form of the EverthingDISC Workplace Profile and expand interviews from 20 minutes to an hour. We also helped the committee develop strategic interview question sets to be used for all candidates to test the issues most important to the credit union. Importantly, the nominations subcommittee approached each interview with a new, elevated perspective of what was required and a clear understanding of what the board was looking for in new volunteers. We recommended Hudson Valley CU use a five-point scale for evaluating candidates based on the outcome of the assessment. Future board members should be: skilled enough to be board chair (even though it might never be right for them to be chair, see January '22 Good Governance article ); critical and strategic thinkers; independent-minded; consensus-builders; and of unimpeachable integrity. We also suggested the nominations subcommittee prioritize diverse candidates and individuals with previous board experience and expertise in the financial realm. The nominations subcommittee selected five of the 18 candidates to interview, ultimately nominating three candidates who were later elected to the board. The subcommittee also launched an associate board member program. (At cues.org/boardpolicies , see package 1). This enabled bringing in a strong fourth candidate as an associate director, creating the opportunity to increase the candidate’s general knowledge of CU governance over time, while benefitting immediately from the candidate’s attributes and expertise. The Onboarding Process Not content with improving only the nominations process, Hudson Valley CU’s leadership also focused on enhancing its onboarding program for new volunteers. A small task force comprising both board and staff was created and led by an expert in training from the CU’s HR department. The task force expanded the CU’s original, skeletal onboarding process into a robust program that includes a 15-plus hour, four-session orientation curriculum with homework assignments and between-session learning. The program also includes a variety of training modalities and sources, including online modules from CUES; in-person presentations from staff and board members; and written materials. Beyond the orientation curriculum, Hudson Valley CU has committed to at least a 12-month onboarding process that includes regular check-ins by the board chair, committee assignments and access to the CEO, and management representatives who can provide tools, answer questions and serve as subject matter experts to help new directors understand the nuances of the CU industry, the CU’s budget, executive compensation and the economy, plus learn how their strategic decisions apply to and impact operations and results. Hudson Valley CU eventually aims to have all its volunteers and supervisory committee members participate in the onboarding process. The Human Dimensions of the Process We would be remiss if we didn’t address the challenges that such a significant amount of change raised. Implementing this multi-phase process was a massive undertaking for Hudson Valley CU’s board, supervisory committee and nominations subcommittee, and it represented a gap-leaping progression in the leaders’ ability to meet members’ needs. (For more, read, “ Key Outcomes and Lessons Learned From a Board Renewal Effort ”.) Successful organizational change involves more than good processes and procedures. People are the pivotal element, and enabling them to integrate new ways of thinking about and doing things is often the most challenging task. The starting point for change is recognizing that it’s needed. Implicitly, there must have been reasons, acknowledged or not, why any action hadn’t come sooner. The reasons change is hard and the right ways to contend with oppositional forces are unique to each situation. Still, Hudson Valley CU’s journey was not uncommon. Its particulars aside, we hope—as does the CU’s leadership—their story will be helpful for others contemplating similar enhancements. Board composition did shift over time at Hudson Valley CU, so a stagnated boardroom cohort was not the main board renewal problem the credit union faced. Rather, the board had not empowered the previous nominations subcommittee to function as a strategically important committee—recruiting the best candidates, helping to refresh the strategic makeup of the board and revitalizing its vision. While today the nominations committee is viewed by the board as one of its most consequential committees, it had been for years reduced to a group of people who executed the simple task of managing the logistics of the nominations process, with little to no strategic input or impact to the overall makeup of the board. Another consequence of that legacy was a contingent that strongly believed that maintaining the status quo was in the CU’s best interest. In their view, the introduction of innovative tools and processes to enhance Hudson Valley CU’s culture and governance posed a threat to the long-held assumption that the nominations process needed to be completely independent from the board and even management. Although the board had signed off on the innovations, some members of the nominations subcommittee concluded that the changes would be detrimental. “Some members of the committee were uncomfortable with the amount of dramatic change the consultants were looking to implement so quickly,” says CUES member Misty Decker, chair of the governance and nominations committee. In such a situation, building trust and giving the naturally conservative individuals the courage to try are what’s needed more than anything else. The antidote to resistance and anxiety-driven risk aversion is assurance, not force. Our approach was to mobilize a small group of institutional leaders—the board chair, the CEO, and the governance and nominations committee chair—to join us in a conversation with the nominations subcommittee members. We acknowledged that the proposed systemic changes were indeed a substantial and understandably frightening departure from the past. We heard their concerns, validating rather than dismissing their impassioned drive to guard normed cultural traditions, and we invited them to question and reconsider the benefits to change. “We were ultimately successful,” Decker adds, “because we had established trust in Quantum Governance’s experience addressing board issues with other credit unions and in Dolus Advisors’ expertise in driving organizational culture change.” Of course, the realities of dealing with stakeholder pushback are rarely straightforward. Navigating opposition can get hot and messy. Agreeing to disagree, building or re-establishing trust, and defining workable pathways to compromise can be arduous. But there is no more important work. And this work is and has been a powerful reminder that high-performing boards are a combination of capabilities and practices coupled with human dynamics and culture. Each of these areas entails differently defined tools and solutions to enhance or repair as well as to strengthen and elevate. They also require a healthy dose of humility to accept—and even celebrate—that the changes we embrace are actually only a work in progress. Alexander Stein, Ph.D . , is founder of Dolus Advisors , a consultancy that helps leaders address psychologically complex organizational challenges. Previous Next

< Back The State of Credit Union Governance, 2018: Six Key Findings Michael Daigneault and Jennie Boden Jan 23, 2018 Use them to increase your board’s focus and effectiveness. We’ve been regularly surveying credit union board members, supervisory (“audit”) committee members, CEOs and senior staff on the executive team for the past five years. And for as many years as we’ve been surveying them, we’ve dreamed about the notion of pulling together a “state of the state” of credit union governance report—both to forward our own understanding of broad trends we’re seeing in the field, and also so that we can share the combined results with you, our friends, colleagues and clients in the credit union community. The culmination of that dream is The State of Credit Union Governance, 2018: Five Data-Driven Recommendations for Future Success . Today, we are pleased to share the report’s key findings with you. We hope that they will challenge you to increase the focus on effectiveness of governance and leadership at your organization—all toward the betterment of your credit union and its members. Key Findings We identified six key findings in total: Board members and CEOs have differing perceptions of governance . Their answers differ on 84 percent of the survey’s 21 key questions, fundamental to good governance—with the exception of the Supervisory Committee survey section, where there is more agreement. (Please note: Percentages throughout the report are rounded up to the nearest decimal; therefore, figures may not total 100 percent.) Board member and CEO perceptions diverge based on tenure. Board members who have served on their boards for a long time have more positive views concerning governance than those board members who have less tenure. Conversely, CEOs with longer tenures tend to be more negative than CEOs with shorter tenures. Bigger really may be better. For 18 of the 21 key questions asked, board members and CEOs of credit unions with assets of $1 billion or greater had survey scores that were statistically significantly higher overall (and therefore more positive views of the CU’s overall governance) than those credit unions with assets ranging from $500 million to $999 million. That is, larger credit unions tend to rate their governance practices higher than those of smaller credit unions. Credit unions that don’t undertake a more comprehensive assessment may have a skewed perception. Those credit unions that participated in survey-only assessments, opting not to include interviews, a document review and a retreat as a part of their process, tended to have more positive scores in many of the areas that we assessed. While the exact reasons for this more rosy viewpoint are unknown, it is a finding that is of genuine concern: Such a skewed—overly positive—viewpoint could cause some credit unions not to take corrective actions when, in fact, some action may be prudent. Respondents are concerned about recruiting future board members. Survey participants expressed concern with the board’s ability to attract the right people to serve on the board in the future, with a full 46 percent of respondents describing their effectiveness in finding, recruiting and nominating new talent as only adequate or less than adequate. CEOs and senior staff perceive lower levels of trust. Just 27 percent of senior staff and 25 percent of CEOs reported that their boards were very effective at building a leadership culture of trust, compared to 53 percent of supervisory committee members and 44 percent of board members. Previous Next

< Back Many Board Problems Boil Down to Communications Challenges Michael Daigneault and Jennie Boden Jan 22, 2019 Directors need to ask good, hard questions—to ‘trust but verify’ in a respectful and professional manner—all toward the good of the credit union. A great number of the governance challenges that we come across in the work that our firm, Quantum Governance, L3C, undertakes with credit unions can be boiled down to matters of communications. Are your board members crossing over into day-to-day operations? Well … have their roles and responsibilities been clearly defined, updated and effectively communicated to them? Are there two or three members of your board who are coming to meetings ill-prepared each and every month (or even just one)? It’s probably time for your board or governance committee chair to have a heart-to-heart, one-on-one conversation with those directors. Is the relationship between your board and CEO riddled with micromanagement, executive sessions and a lack of trust? It’s possible that you stopped having authentic, open dialogue far too long ago. After years of surveying credit union board members, supervisory committee members, CEOs and senior staff members, Quantum Governance, along with CUES, recently published The State of Credit Union Governance 2018: Five Data-Driven Recommendations for Future Success . In it were three key findings relative to the need for more open, trusting communications that both surprised and troubled us. We encourage you to take notice of them and discuss these key findings with your board. If your credit union is struggling with any of these issues, it might be time to polish your own communications skills—individually and as a group. Key Finding No. 1: More than a third of respondents surveyed reported that their board does only an adequate or less than adequate job of asking the hard questions that need to be asked. Key Finding No. 2: Thirty-nine percent of respondents reported that their board is only adequate or less than adequate at holding each other accountable. Key Finding No. 3: And only 25 percent of CEOs and 27 percent of senior staff reported that their boards are very effective at building a leadership culture of trust—compared to 53 percent of supervisory committee members and 44 percent of board members.So , what’s happening at all of these credit unions? We were recently working with a credit union that received what we would term below average scores on survey questions regarding “accountability” and “asking the hard questions.” “Where do we begin?” they asked. Luckily for them, their score on the “trust” question was particularly high—a good starting ground and a place from which to build. They were quick to say that they all got along and worked well together—maybe too well together, perhaps? How many of your board votes are unanimous? Are your board members held accountable when it’s appropriate? And, how many hard questions are you asking in your board meetings? The mark of a good board is not unanimity or harmony 100 percent of the time. Your job as a board member is to ask good, hard questions. To trust but verify. In a respectful and professional manner. All toward the good of the credit union. Be authentic. Be direct. Be open. Keep your promises. Keeping promises builds trust, and you’ll need to rely on strong relationships of trust while you’re holding each other accountable in the boardroom. Speaking of accountability: Hold each other accountable as board members. Ask the hard questions that need to be asked. It’s among your most fundamental roles as board members. Previous Next

Arlene Reuss Governance Administrator Arlene is the Governance Administrator for Quantum Governance, L3C. She married a career Marine and through considerable moves throughout the states and Japan, established a career in both the business and volunteer communities. She has earned numerous service accolades from the American Red Cross, Navy Marine Relief Society (budgeting) and Girls Scouts of America. Arlene’s resume includes numerous positions over the years in the areas of Administration and Accounting to include Controller/Assistant General Manager for a multimillion-dollar Floor Mat company. She established new Operations, Finance and Personnel practices that helped to grow the company by 40%. She worked as the Finance & A dministrative Manager for Maryland Coalition Against Sexual Assault (MCASA), where she was key in insuring proper tedious distribution of funds for grants as required by State and Federal government. Arlene worked for Anne Arundel Public Schools, she worked with the Individualized Education Programs and also with HR to insure teacher certifications and background qualifications. One of Arlene’s passions, Field Hockey, turned into a part time advocation as well. She coached for over two decades on the High School Level providing skills and mentorship to hundreds of young ladies. Arlene remains active in the community to include serving on the Board of Trustee’s at her church. Back

Research & Reports Research The State of Credit Union Governance, 2023 This report identifies four governing elements central to measuring good governance and what correlations exist between them. The State of Credit Union Governance, 2023 Download Report Research The State of Credit Union Governance, 2020 This report offers findings from 115 credit unions on Board structure, governance, leadership, strategy and decision-making. The State of Credit Union Governance, 2020 Download Report Research Should Credit Unions Pay Their Directors? This Report explores the state of director compensation and offers considerations when exploring paying board directors. Should Credit Unions Pay Their Directors? Download Report Research The State of Credit Union Governance, 2021 This report examines the impact of COVID-19 and increasing calls for DEI on the credit union community. COVID-19 and DEI: Revolution & Evolution in the Credit Union Community Download Report Research The State of Credit Union Governance, 2018 This report analyzes governance practices at 70 credit unions focusing on Board structure, leadership, fiduciary oversight and strategy. The State of Credit Union Governance, 2018 Download Report White Paper A New Model Based on Classic Principles This white paper presents discussion on a new approach to the credit union cooperative model. A New Model Based on Classic Principles Download Report

Traci Tucker Consultant Traci leverages her 30 years of marketing, operations, and communications experience in her work with credit unions. Prior to her work with Quantum, Traci was the marketing executive at GTE Federal Credit Union, working with the marketing team, executive team, and board to develop and execute successful strategies for growth and member service. She transitioned to the agency world, first as an account executive and head of branding, and then as the vice president of client service, working with clients and overseeing the agency’s team and operations. Traci graduated from Florida Southern College with a B.S. in Business Administration with a concentration in marketing management, and lives in Florida. Back

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< Back Serving Members’ Best Interests Benefits From A Constructive Partnership Jennie Boden Aug 24, 2021 When directors, supervisory committee members and executives collaborate effectively, members benefit. I spent the better part of my career working in the nonprofit sector. I like to say that I’ve had every job from executive assistant to executive director. And I loved every minute. When you work for a nonprofit—any kind of nonprofit—you do it because you love it. You know, in the back of your mind somewhere, that you could make more money in the corporate sector, and sometimes kind and well-meaning family and friends even remind you of it. But you stay because you love it, and you feel committed to what you’re doing. I’ve found the same to be true for all the credit union staff that I’ve met, interviewed and worked with since I joined Quantum Governance more than seven years ago. While credit unions aren’t exactly like some of the charitable nonprofits where I worked, they surely are mission-driven, and as you know, it’s all about serving the members. Of course, one of the central roles and responsibilities of a credit union board member is to “carry out his or her duties as a director in good faith, in a manner such director reasonably believes to be in the best interests of the membership.” And we hear this from credit union board members all the time. Ask a credit union board member what his or her job is, and he or she will most often reply “to represent the best interests of the members.” One of my former colleagues used to say that was a board member’s response when he or she wasn’t sure what else to say—when the person wasn’t clear what the job really was. But I’m not quite so cynical. I do think that the roles and responsibilities of board members are changing, especially as credit unions continue to grow and the environment around them is becoming increasingly complex. But almost every board member I’ve ever met (and I’ve met a lot of them) really does seem to care about the credit union and is committed to doing what’s right for their members. The challenge, I believe, in this answer is that often board members believe they have the “corner on the market” in terms of representing the members’ best interests. What Does It Mean to Serve Members’ Best Interests Some years ago, Quantum Governance conducted a governance assessment for a large, multi-billion-dollar credit union. As a part of our assessment, we interviewed all the board members, supervisory committee members and senior managers. There seemed to be a perception among the board members that it was the board’s job to not only act “in the best interests of the membership” but almost to protect the membership from the staff. A member of senior management put it like this: “There’s a lack of trust. It’s not overt, so they [the board] won’t come out and say, ‘I don’t trust what you’re saying.’ There will be an attitude like what you’re saying is somehow colored for whatever reason. Like there’s another angle that we’re playing that benefits us and not the membership. As if we don’t care about the membership, too.” As if they “don’t care about the membership, too.” Of course, they do. A Constructive Partnership Serves Members’ Best Interests At Quantum Governance, we believe in the power of a constructive partnership between all three components of a credit union’s governing entities—the board, the supervisory or audit committee, and the senior managers. A constructive partnership puts a focus on effective collaboration, rather than control or even competition between the board and senior management. It actively fosters a leadership culture of trust that extends beyond even the credit union’s board and senior management to include the members of the supervisory or audit committee so that all three governing bodies are working together—collaboratively—to execute fiduciary oversight, craft strategy, offer mutual support and hold each other accountable—all toward the betterment of the credit union and in its members’ best interests. A constructive partnership recognizes that each of the three governing bodies has its own distinct roles and responsibilities. For example, of course the board and the board alone is responsible for setting the CEO’s salary and benefits, and we would never expect the board to wade into day-to-day operations or members of senior management to oversee the external audit that is put in place as a check and balance on their work. But just because the National Credit Union Administration has explicitly included the notion of protecting the members’ interests in the list of board members’ roles and responsibilities, don’t assume that everyone else either volunteering or working at the credit union isn’t just as committed to that very sacred duty, too—from the members of your supervisory or audit committee to your CEO and other members of senior management to the dedicated staff who manage your call center. Otherwise, especially in today’s economy, they’d likely be working elsewhere. Previous Next